Key Takeaways
- MTAR Technologies (MTARTECH) is set to grow revenue ~40% YoY through FY28, powered by AI‑driven data‑center demand.
- The company’s decade‑long partnership with Bloom Energy gives it access to solid‑oxide fuel‑cell (SOFC) tech that can deliver 50‑100 MW in under four months.
- Bloom Energy’s order backlog tops $20 bn, with major hyperscalers and utilities as customers – a tailwind for MTAR’s manufacturing footprint.
- Motilal Oswal reiterates a BUY rating with a target price of INR 4,810, implying a 50× FY28E EPS multiple and a sub‑1× PEG.
- Bull case hinges on accelerated data‑center rollouts; bear case centers on execution risk in scaling SOFC capacity.
You’re overlooking the fastest power solution for tomorrow’s AI data centers.
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Why MTAR Technologies' Fuel Cell Edge Aligns with AI Data Center Surge
Data‑center construction is accelerating at a 14‑18% CAGR, with roughly 100 GW of new capacity expected between 2026 and 2030. The bottleneck isn’t capital—it’s reliable, on‑site power. Traditional grid connections can take 2‑5 years, a timeline AI workloads simply cannot afford. This is where solid‑oxide fuel cells (SOFC) shine. Unlike conventional combustion plants, SOFCs convert chemical energy directly into electricity with efficiencies above 60% and emit virtually no pollutants. Bloom Energy’s SOFC modules can be shipped, installed, and commissioned within 90‑120 days, delivering 99.999% uptime – the “five‑nines” reliability that hyperscalers demand.
MTAR Technologies manufactures the critical pressure‑vessel and balance‑of‑plant components for these SOFC systems. Its engineering pedigree in defense and aerospace translates into ultra‑high‑integrity fabrication, a prerequisite for the high‑pressure, high‑temperature environments SOFCs operate in. By leveraging Bloom’s expanding order backlog – which now exceeds $20 bn and includes contracts with Brookfield, AEP, Oracle, and Equinix – MTAR stands to capture a growing slice of the power‑infrastructure pie.
Sector Ripple: How Defense, Aerospace, and Clean‑Energy Players Are Watching
The industries MTAR serves – defense, aerospace, nuclear, and clean energy – are all converging on the need for resilient, low‑emission power. The Indian defence sector, for instance, has earmarked $5 bn for next‑generation energy‑secure bases, favouring modular, fast‑deployable solutions. Aerospace manufacturers are experimenting with SOFCs for auxiliary power units, promising weight savings and lower emissions. Meanwhile, the clean‑energy transition accelerates demand for distributed generation that can plug directly into micro‑grids, a niche where SOFCs excel.
Peers such as Tata Power and Adani Energy are heavily investing in solar and battery storage, but neither has a comparable SOFC platform. This technological differentiation could allow MTAR to secure long‑term supply contracts in sectors where downtime is not an option, creating a defensive moat around its revenue stream.
Competitive Landscape: Bloom Energy Partnership vs Tata Power & Adani’s Energy Plays
Bloom Energy’s global reach gives MTAR an advantage that domestic rivals lack. While Tata Power’s acquisition of global solar assets expands its renewable footprint, it still relies on grid‑connected solar farms that face curtailment risk. Adani’s aggressive push into wind and solar adds capacity but does not address the “last‑mile” reliability challenge for AI‑intensive workloads.
By contrast, MTAR’s partnership with Bloom provides a ready‑made pipeline of high‑margin, technology‑intensive projects. The partnership also grants MTAR early access to Bloom’s next‑generation 2 GW manufacturing line slated for 2026, effectively doubling capacity from the current 1 GW. This scale‑up will enable MTAR to negotiate better economies of scale on raw‑material purchases (e.g., high‑purity nickel alloys) and improve gross margins.
Financial Forecast Deep‑Dive: Revenue, EBITDA, and EPS Projections to FY28
Motilal Oswal models a 40% CAGR in revenue, 55% in EBITDA, and 78% in adjusted PAT for FY25‑28. The underlying drivers are:
- Revenue acceleration: New SOFC contracts with hyperscalers are expected to add INR 3,200 mn annually by FY27.
- Margin expansion: Scaling manufacturing to 2 GW by CY26 will lift EBITDA margins from 18% (FY25) to roughly 30% (FY28).
- Capital efficiency: Capex is projected to average 12% of revenue, lower than the industry average of 18%, thanks to modular plant designs.
The valuation model applies a 50× FY28E EPS multiple, delivering a target price of INR 4,810 – roughly a 6× upside from the current market level. The implied PEG ratio of ~0.6 underscores the stock’s growth‑adjusted cheapness.
Investor Playbook: Bull and Bear Cases for MTAR Technologies
Bull Case: Rapid AI‑driven data‑center expansion forces hyperscalers to adopt SOFC power solutions, driving MTAR’s order book beyond the projected $20 bn backlog. Successful execution of Bloom’s 2 GW capacity lift translates into margin compression and higher free cash flow, supporting a potential multiple expansion to 70× FY28E EPS.
Bear Case: Execution risk – scaling SOFC manufacturing within tight timelines – could lead to cost overruns. Additionally, if grid‑upgrade policies accelerate faster than anticipated, the urgency for on‑site fuel cells may diminish, throttling demand. In this scenario, the stock could trade below the target price, with a multiple re‑rating to 35× EPS.
Investors should weigh these scenarios against their risk tolerance. A phased allocation – starting with a modest 2‑3% portfolio exposure and scaling up on earnings beats – can capture upside while limiting downside.